South Carolina businesses are required to establish an unemployment tax account with DEW. Your business is liable for quarterly UI tax contributions if it meets any one of the following criteria.

Pays $1,500 or more in wages in any calendar quarter or has at least one employee during any 20 weeks in a calendar year.

Acquires all or part of a business that was an employer subject to UI taxes at the time of the acquisition.

Is liable under the Federal Unemployment Tax Act (FUTA) and has employees in South Carolina.

Elects to become a liable employer.

Pays cash wages of $1,000 or more in any calendar quarter for domestic services.

Pays $20,000 or more to individuals employed in agricultural labor during any calendar quarter.

Employs 10 or more individuals in agricultural labor for a day in any 20 weeks in a calendar year.

Exceptions

In particular situations for-profit businesses may not be liable for UI taxes for certain individuals. Below are just two examples of situations where employers may not be liable for UI taxes.

Independent Contractors
Businesses that employ independent contractors are not liable for UI tax contributions on those individuals. The department decides whether a worker’s employment status is that of an employee or an independent contractor. Although a contract between parties is considered, the fact that it states the relationship as an independent contractor does not bind the department in its determination.

Multi-state workers
When an employee works in South Carolina and another state, the department applies the following test to determine employment reportable to DEW. The tests are applied in the following order.

Localization
An employee’s services are in employment and "localized" in a state if he performs all services in the state or performs a majority of his services in that state with incidental services performed outside it.

Base of Operations
If test one does not apply in any state, an employee’s services are in employment in a state if he performs some of his services and his base of operations is in that state as well. Base of operations is defined as a place of more or less permanent nature where the employee starts work and where he customarily returns to perform his contracted work.

Place of Direction and Control
If tests one and two do not apply in any state, an employee’s services are in employment in a state if some of his services are performed there and his employer exercises general direction and control over him from that same state.

Residence of Employee
If tests one, two and three do not apply in any state, an employee’s services are in employment in a state where he performs some of his services, and he lives there as well.

For a complete list of covered and exempt services, please refer to the South Carolina Code of Laws, sections 41-27-210, 41-27-220, 41-27-230, 41-27-235, 41-27-260.